Dear Taxpayer,
A defective return notice was wrongly issued on 29th Nov 2024 stating that income is offered u/s 44AD, even though the gross receipts are more than Rs.2 crores and the balance sheet and profit and loss account have not been filled, and books of accounts are not audited.
Kindly ignore the communication sent in this regard.
We regret the above erroneous communication, which was issued, for the return filed for the AY 2024-25. This return is now being taken up for processing. Please await the receipt of intimation for the results of processing.
Regards,
N SAYIRAJ, I.R.S
Deputy Director of Income Tax,
CPC, Bengaluru
This communication is computer generated and may not contain signature. Where sent by email, this is signed with the digital signature of the Income Tax Department – CPC, which is obtained from a certifying authority under the Information Technology Act, 2000. For any queries, please call CPC on telephone number 1800-4252229(Toll Free) or 080-22546500 and quote the Communication Reference Number mentioned in the attached Communication.
When is Defective Return Notification Issued?
When issuing a defective return notice pursuant to Section 139(9), the Assessing Officer may take the following into account:
- Incomplete Income Tax Return (ITR): An incomplete income tax return (ITR) is one that doesn’t include all of the required information in its annexures, statements, or mandatory columns, such as income from other sources.
- Missing tax Information: If taxes have been paid but the ITR is missing information about them, such as TDS, TCS, advance tax, or self-assessment tax information.
- TDS and Income Mismatch: If Tax Deducted at Source (TDS) is claimed, but the associated income is not included in the ITR’s tax-offering list. For instance, both interest income and tax deducted by the bank should be recorded in the ITR if you received interest income from term deposits. However, when filing a return, the income tax department will automatically fill in all of your income information, and there is also the option to upload 26AS, which will aid in preventing such inconsistencies from the outset.
- Bookkeeping Problems: Defective return notices may result from incomplete or non-submission of required books of accounts, including trading accounts, profit and loss accounts, balance sheets, and others.
- Income Tax Audit Concerns: The full audit report, including the profit and loss account, balance sheet, and auditors report, should be supplied if an audit is required to be performed under section 44AB. You risk receiving a faulty return notice if you fail to provide these documents or submit an incomplete audit report.
- Cost Analysis Non-compliance: According to the Companies Act of 2013, a faulty return notice may result from failure to submit the “Cost Audit” facts.
- Presumptive Taxation Errors: When presumptive taxation is involved, giving an erroneous calculation of presumptive income, withholding pertinent information, or having mismatched gross receipts might result in a faulty return notice. For instance, a faulty return notice will result if gross receipts are not reported in the profit and loss account or if the amount reported in ITR 4 is greater than Rs. 2 crore.
- Tax Payment Discrepancies: A notice of defective return may be issued if the income tax payable as calculated based on the income tax slab are partially paid or if the amount paid differs from the tax liability calculated by the system.
- Incorrect details in ITR: Inaccurate information in the ITR can result in a defective return notice if the ITR is filed with inaccurate information about turnover, income thresholds, or inappropriate reporting for one or more head of income.
- Name mismatch: When the name on the PAN card and the name on the ITR are different.